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By Marcus Hoy

Jan. 21— A Dec. 8
Norwegian Supreme Court ruling (015/828) that allowed a retail
chain to define a single employee as a redundancy pool could
strengthen the position of employers when downsizing occurs, a
Norwegian lawyer tells Bloomberg BNA. Per Arne Damm, an attorney at
law firm Simonsen Vogt Wiig, said a Jan. 14 statement that the
ruling (“A” v Gresvig Detaljhandel AS)
would likely affect existing case law and could reduce the job
security of senior employees.

Decisions and Appeals

Under Norway's Working Environment Act (2005/62),
companies seeking to reduce their workforce are required to
consider all employees working at the same legal entity as
candidates for redundancy. The Supreme Court ruling dilutes this
stipulation by broadening exceptions to the requirement.

The case involved a sports retail chain, Gresvig
Retail AS, which operates a large number of stores across Norway.
During a major reorganization and rebranding operation, a number of
stores were shuttered including a small store with a single
full-time employee referred to as “A.” In conjunction with his
redundancy, “A” was offered a sales position in another store at a
lower salary level, which he declined. “A” was subsequently deemed
unsuitable for a vacant management position.

The employee filed a claim for unfair dismissal and
on May 7, 2014, Kristiansand District Court ruled that the
company's action was illegal because the employee was qualified for
the management position. The district court ordered the company to
pay costs and 108,000 kroner ($12,300) in compensation. The company
appealed the ruling, and on Feb. 6, 2015, Agder High Court of
Appeal found in its favor in a majority decision, the dissenting
judge holding that the employee was suited for the management
role.

“A” appealed the case to the Supreme Court, which
was asked to rule on whether the employee should have been offered
the management position and whether the company's decision not to
include other employees in the redundancy pool could be justified
under the Working Environment Act and established case law.

Administrative Burden

The company argued that the practice of limiting the
pool to individual stores was necessary as the alternative of
including employees from the entire retail chain would entail a
disproportionate administrative burden. All its other stores had
more than one employee, the company pointed out, arguing that the
single employee's position was unique and his duties differed
substantially from those of employees at other stores.

Previous case law allowed a number of exceptions to
the “whole legal entity” in the redundancy pool, the Supreme Court
noted. Such exceptions can be made if a wider pool would place a
disproportionate administrative burden on the company,
significantly undermine staff morale or hinder the retention of
skilled employees. While it was relatively common practice for
retail companies to limit redundancy pools to individual stores,
however, a redundancy pool had never before been limited to a
single employee.

Unique Circumstances

Given the unique circumstances of the case, the
court concluded that the single employee could be classed as a
redundancy pool, and the company was within its rights not to offer
him a management position since his experience did not meet that
required for such a position.

“This ruling develops existing case law on selection
pools in Norway,” Damm told Bloomberg BNA. “Whereas previously it
was questioned whether a selection pool could comprise as little as
one person, this ruling has clearly stated that it can.”

While the ruling did not weaken the rights of trade
unions, Damm said, it could imply less job security for employees
who currently enjoy a particularly high protection from redundancy,
such as those with a combination of a long length of service and
seniority.

“Whereas a person in this category would not be a
candidate for redundancy in a wider selection pool,” Damm said, he
or she “could potentially be made redundant if the selection pool
consisted of this person only.” To his knowledge, Damm said, EU
case law does not address questions related to redundancy selection
pools or selection criteria.

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